What is Soft and Hard Limit?
Soft and Hard Limits are used to safeguard from setting a price lower than the cost (Vendor InPrice) and to avoid excessive discounting. Both limits define the markup on top of the Vendor InPrice and are not influenced by the Price Source when configuring the markup.
The Soft Limit defines the limitation for the Account Manager while the Hard Limit defines the one for the Seller admin.
For example, a user with the permission Seller admin has set:
- Price Source: Retail Price (this is by default setup).
- Markup: 0%
- Soft Limit: 20%
- Hard Limit: 10%
- Vendor Price: 3.37 EUR
- ERP Price: 4.20 EUR
When applying calculations:
- Soft Limit defines the minimum allowed price to be set by Account Managers:
- x = 3.37+20% = 4.04 EUR
- As such, the Account Manager can give a maximum discount of 3.8% for this offer:
- (4.20-4.04)/4.20 *100% = 3.8%
- Hard Limit defines the minimum allowed price to be set by Seller admin:
- x = 3.37+10% = 3.71 EUR
- The Seller Admin can give a maximum 11.7% discount for this offer:
- (4.20-3.71)/4.20 *100% = 11.7%
NOTE! There are certain conditions to be met:
1) If Price Source = InPrice:
Soft Limit ≥ Hard Limit ≥ Markup
& Markup ≥ 0
2) If Price Source = Retail Price:
Soft Limit ≥ Hard Limit
Markup ≥ [(InPrice - Retail Price)/Retail Price] x 100%
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Articles in this section
- How to configure mark-up for Azure Marketplace offers?
- Usage Based Calculator
- Price Hierarchy
- What is Price Source?
- What is Soft and Hard Limit?
- Seller: Price configuration for Customers
- Seller: What is Generic price?
- Seller: What is Offer level price?
- How to promote offer(s) with a "Special Price" (badge)?
- How to configure prices for Offer groups?